OFAC Finds Bank Violated WMD Proliferation Sanctions Regulations

OFAC issued a Finding of Violation ("FOV") to a bank for violations of the Weapons of Mass Destruction Proliferators Sanctions Regulations ("WMDPSR"), 31 C.F.R. Part 544.

In an enforcement release, OFAC stated that the violations concerned the bank's maintenance and processing of multiple transactions on accounts held by two individuals on OFAC's List of Specially Designated Nationals and Blocked Persons ("SDN List"). OFAC found that the bank’s compliance procedures relating to the accounts of designated individuals were insufficient, as they only required the screening of the bank's entire customer base once a month, reserving daily screenings for new accounts or existing accounts with certain changes. This deficiency resulted in a 14-day lapse between designation and the bank's closure of the non-compliant accounts.

OFAC determined that the bank violated OFAC Section 544.201 of the WMDPSR ("Prohibited transactions involving blocked property").

OFAC considered mitigating factors in response to the violations, including that the bank (i) cooperated with the OFAC investigation, (ii) implemented a manual process to be notified of all OFAC SDN List updates and to manually rescreen the entire customer base whenever there are updates to the SDN List and (iii) updated the frequency of screening the entire account base. As a result, OFAC determined that a finding of violation was appropriate in lieu of a civil monetary penalty.